AGA Today

Federal Accounting Corner

Unavailable Funds
One of the main differences between governmental accounting and private-sector accounting is that an agency needs permission to use its funds, whereas the management of a company has broad discretionary powers. In the Standard General Ledger (SGL), there are a number of specialized budgetary accounts to handle different scenarios where funding is unavailable. 

Appropriation Flow
If the standard appropriation process is a river, then there are many side pools to capture and (temporarily) hold funds. The first step is the appropriation recorded by entry A104 and its status account is 4450 Unapportioned Authority, which is unavailable until the Office of Management and Budget (OMB) apportions it. However, if the president proposes a rescission (entry A137), then the funds are moved to 4420 Unapportioned Authority – Pending Rescission (the actual rescission uses entry A136). If Congress appropriates the funds but OMB decides not to apportion it, then entry A126 moves the funding to 4430 Unapportioned Authority - OMB Deferral. If the funds are subsequently apportioned, then entry A126 is reversed to move the 4430 balance back to 4450. Balances in 4450 become available by entry A116 moving them to 4510 Apportionments.

It’s not clear if balances in accounts 4510 through 4580 are available or unavailable. The agency has to allot the funds (entry A120) to move them to 4610 Allotments – Realized Resources and from there they can be spent. While agencies are allowed to use SGL accounts 4520 through 4580 Reserved for Agency Use, they have to report these as 4510 or 4610 in FACTS II since the FACTS II system does not recognize them.

Congress can also temporarily reduce the funding in certain non-appropriated funds, although they may not get around to increasing them again. Normally the available balance is transferred to 4382 Temporary Reduction – New Budget Authority or 4383 Temporary Reduction – Prior-Year Balances (entry A135 or A418). If the funding is restored, the entry is reversed. Other­wise, at the end of the year the balance is reclassified to account 4384 Temporary Reduction/‌Cancellation Returned by Appropriation (entry F360, but reversed the next year using entry A108), 4168 Allocations of Realized Authority Reclassified – Authority to be Transferred from Invested Balances – Temporary Reduction (entry F362), or 4123 Amounts Appropriated from Specific Invested TAFS Reclassified – Receivable – Temporary Reduction (entry F366).

While accounts 4387 Temporary Reduction of Appropriation from Unavailable Receipts, New Budget Authority and 4388 Temporary Reduction of Appropriation from Unavailable Receipts, Prior-Year Balances use the term “Temporary Reduction”, the entry to record them (A189) includes a reduction to fund balances and a transfer out, so they act more like a negative resource than an unavailable account.  They also close to 4201 Total Actual Resources – Collected (entry F302), which no other unavailable account does.

Anticipated Flow
Anticipated funding can include collections in account 4060 or 4070 (A140), appropriations in 4120 (entry A102), transfers from invested balances in 4165 (A402), transfers from other funds in 4160 or 4180 (A468), reimbursements in 4210 (A702), transfers from a trust fund in 4215 (A114), and recoveries in 4310 (A138). If these anticipations are apportioned, then the funding is moved to account 4590 Apportionments – Anticipated Resources – Programs Subject to Apportionment using entry A118; and if not, it is moved to 4690 Anticipated Resources – Programs Exempt from Apportionment using entry A119. They cannot be spent until realized (entry A122 for apportioned and A123 for exempt from apportionment).

Sometimes the anticipated authority is simply unavailable from the start and is posted to 4630. The SGL lists this as an option for recoveries (A138) and collections (A140). 

Unavailable on Collection
Some trust or special funds have the authority to use offsetting receipts once collected, but others do not, or they may collect more than they have authority to use. In these cases, account 4394 Receipts Unavailable for Obligation Upon Collection holds the unavailable amount (entries A188, A195, A250, and C114). If the authority is subsequently granted, then the balance moves to available (entry A190). If the balance is transferred to another fund, then 4394 is debited and the offsetting credit goes to account 4129 Amounts Appropriated from Specific Invested TAFS – Transfers-Out (entry A530), though the transfer can be initially set up as a payable in account 4127 Amounts Appropriated from Specific Invested TAFS – Payable (entry A520). Otherwise, account 4394 remains open indefinitely.

Temporary Preclusion
The last type of unavailable amounts are those temporarily precluded from obligation.  There are five different accounts that can be used to record the reduction in available funds, each with their own entry to record it:  4395 Authority Unavailable for Obligation Pursuant to Public Law – Temporary (entry A128), 4396 Special and Trust Fund Refunds and Recoveries Temporarily Unavailable – Receipts Unavailable for Obligation Upon Collection (A130), 4397 Receipts and Appropriations Temporarily Precluded from Obligation (A127), 4398 Offsetting Collections Temporarily Precluded from Obligation (A129), and 4399 Special and Trust Fund Refunds and Recoveries Temporarily Unavailable – Receipts and Appropriations Temp. Precluded from Obligation (A139).  Three of these accounts record a reversal if the funds subsequently are made available, but for the two others, a new entry is posted instead using a new SGL account: 4157 Authority Made Available from Receipt or Appropriation Balances Previously Precluded from Obligation, or 4158 Authority Made Available from Offsetting Collection Balances Previously Precluded from Obligation (see chart below). These new increase accounts are then closed against the decrease account during annual close. All the three accounts, which do not have special increase postings, are closed at year-end 4394 or 4397.

Conclusion
Before there was a SGL, there were complicated budget reports explaining how funding was provided and either that it was available or why it was unavailable. The complicated reports have not gone away, so the SGL Board has created several different accounts in order capture the needed information in the journal. I have described only the more common and better documented unavailable accounts. Only use these after consulting with Treasury or OMB. —Simcha Kuritzky, CGFM, CPA     

This column is provided as part of a free exchange of ideas in federal accounting, and is not reviewed substantively before publication. Please send all comments, queries, or corrections to Simcha.Kuritzky@CGIFederal.com.